NTRC, other groups back tax admin reforms

The Department of Finance (DoF) said Bureau of Internal Revenue (BIR) tax administration reforms under the Comprehensive Tax Reform Program (CTRP) has gained the support of various institutions led by the state think tank National Tax Research Center (NTRC).

In a statement over the weekend, the DoF said the groups have expressed their support for the proposal on the mandatory connection of point-of-sale (POS) machines of businesses to the BIR and the use of electronic receipts.

NTRC Executive Director Trinidad Rodriguez was quoted saying that using digital technology “will facilitate real-time or near real-time collection and assessment of taxpayers data” by the BIR.

The DoF said the Philippine Institute of Certified Public Accountants (PICPA) and the Management Association of the Philippines (MAP) also backed the proposed tax administration reforms using digital technology.

“Insofar as the POS interconnection and centralized system in the BIR is concerned, we’re fully supportive of that and also for some other specifications, because we believe that it can eventually reduce the cost of administration and even simplify the examination of the BIR,” Alex Cabrera, who represents both MAP and PICPA, was quoted as saying.

Kenneth Ng of the SM Group and Julie del Rosario of Jollibee Foods Corp. expressed their support for the use of e-receipts and the mandatory connection of POS systems to the BIR, according to the DoF.

Finance Undersecretary Karl Kendrick Chua explained that shifting to the digital platform will tighten tax administration and help the government collect the correct revenues from private businesses.

He said the shift “will require significant investments” for both the BIR and the businesses involved and would be more effectively used for those engaged in retail businesses.

“In principle we support many of the provisions—in particular we think that tightening the tax administration by mandating the use of fuel marking, relaxing the bank secrecy for fraud criminal cases, enhancing tax administration via e-receipts, interconnectivity, and data sharing will all enhance administration of tax revenues,” Chua was quoted as saying.

“Not all industries will find the POS machine interconnection cost-effective. This I think is more effective on the retail level. This is something that we need to study. BIR has already been trying to look into these issues,” he added.

The DoF said use of digital technology to improve tax administration in the BIR and the Bureau of Customs, the fuel marking and monitoring of petroleum products, and the relaxation of bank secrecy laws for tax fraud cases, are among the legislated tax administration measures included in House Bill (HB) 4774.

Package One of the DOF’s CTRP is contained in HB 4774, which was authored by Rep. Dakila Carlo Cua of Quirino who chairs the House Ways and Means Committee.

The House committee approved “in principle” the first phase of the CTRP last week, before Congress went on Lenten break.